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2012 Predictions for the SAP Community

by Davin Wilfrid

December 9, 2011

by Davin Wilfrid, insiderRESEARCH

Predictions loathe hindsight. They jump boldly into the world, arms outstretched and dressed in silk, but grow increasingly naked and self-conscious as time moves on and reality sets in. Take a look at some enterprise software predictions for 2011 and you’ll see what I mean. Remember when Microsoft was going to buy SAP?

It’s not the predictions’ fault, really. A milquetoast prognostication is a prognostication ignored. To survive in the crushing vastness of digital space, a prediction has to be bold – whether that boldness is inspiring, threatening, or comforting. Whether it comes to pass is typically a secondary concern.

Still, there’s a certain nobility in the effort to illuminate the darkness ahead. Predictions help us envision a better world which we helped create; or avoid trouble spots on the road ahead. And they’re fun. And sometimes we even get them right.

Here are my predictions for 2012.

1. SAP professionals race against the machineIn his new book Race Against the Machine, MIT professor Erik Brynjolfsson examines the impact of the digital revolution on employment. Prior technological advances, like robotics, primarily displaced unskilled labor such as assembly line workers. Accelerating advances in information technology have allowed companies to leverage machine labor for increasingly skilled work – reducing the need for humans in jobs that previously only humans could perform. While t
his has increased productivity dramatically, Brynjolfsson writes, it also has a serious impact on the professional world as a whole.

“As the digital revolution marches on, each successive doubling in power will increase the number of applications where it can affect work and employment. As a result, our skills and institutions will have to improve faster to keep up lest more and more of the labor force faces technological unemployment. We need to invent more ways to race, using machines, not against them,” Brynjolfsson wrote on his blog.

In other words: First they came for the farm workers, then they came for the factory workers, then they came for the accountants and business analysts. The way to survive the man/machine redundancy trap, according to Brynjolfsson, is to incubate a culture of entrepreneurialism to push the limits of innovation. At the macro level, all eyes are on SAP to help companies harness technological enhancements into innovative products. At the company level, this means SAP professionals need to think creatively about how to leverage the massive power of real-time analytics, business intelligence, and other cutting-edge technologies to add business value. Creativity is king.

2. SAP gets even more cloudy SAP’s acquisition of SuccessFactors, a cloud-based provider of human resources software, is an affirmation that SAP will attempt to meet its “on demand” strategy goals in part through acquisition. Gone are the days when SAP would rely solely on its own considerable stable of developers to innovate – the cloud is too expansive, too fast paced to compete against from behind.

Michael Fauscette of IDC says
cloud vendors are on the brink of “rapid consolidation” by larger companies like SAP and Oracle. The economics are just too plain to ignore.

“Companies built around limited software offerings can blaze the trail but in the end, the enterprise software landscape is dominated by a few large vendors who will pick off successful innovators as the concepts gain traction and the market matures. This is the innovation cycle in today's enterprise software market,” Fauscette writes on Seeking Alpha.

I expect SAP to shore up key areas of focus in the cloud with at least one or two acquisitions in 2012, while maintaining its focus on improving and selling Business ByDesign – its flagship on-demand product.

3. Mass feline genocideAfter the SAPPHIRE conference in Orlando, Florida last year, John Appleby of Bluefin Solutions posted the below image on Twitter. It was his way of warning SAP against abusing hyperbole when discussing technological breakthroughs like HANA and embedded analytics.

I predict mass feline genocide as SAP continues to release the purpose-built, industry focused analytics packages it promised at SAPPHIRE last year, and companies latch on to the real value of having access to real-time analytics. What started with Colgate-Palmolive, Baker Hughes, and Celestica will spread to the rest of the SAP installed base rapidly. It won’t be easy, at that point, for SAP’s marketing/PR arm to restrain itself – even if it means the death of thousands of kittens.

Like most industry watchers, I spend a lot of time on Twitter (see above). I derive an awful lot of professional value from the interactions, insights, and eavesdropping that takes place on the world’s most powerful social fire hose. Because the value of Twitter (and other social tools) is so self-evident to many, it wasn’t long before we all began to hold forth on how social media paradigms would fundamentally change the enterprise and how we do business. It’s all buzz all the time. A few weeks ago, there was even speculation that SAP would snap up Jive or another social-focused provider of collaboration software.

R “Ray” Wang, one of the smartest analysts out there, recently compiled a list of 43 use cases for enterprise social software, dividing them into three categories: analytics, internal collaboration, and external engagement. He predicts more use cases will emerge quickly as the trend toward consumerization of IT continues.

Ray makes a compelling case, and I think the top use cases cited in his research (service/support, PR/marketing, projects, and some HR activities) are likely to grow quickly at many enterprises. But I’m not convinced the enterprise world is ready for deep integration of social software into legacy IT processes. For one thing, CIOs and CEOs are holding fast on ROI as the economy limps along – a notoriously high hurdle for social software. Second, I’m not convinced that the adoption of consumer social platforms will have the same impact as smartphones and tablets — which are forcing enterprises to rethink the way they deliver business applications to users. Most SAP professionals I talk to during interviews and at conferences are, at most, light consumers of social media and I suspect that resistance to a forced march into social software would be met with significant resistance.

5. The mobility picture clears upWhen it comes to running business applications from mobile devices, the question isn’t whether it’s going to happen, but how. SAP paid an awful lot of money to bring Sybase into the fold — primarily for the company’s enterprise-ready mobile application development and device management platforms. SAP is coordinating its mobile strategy around Sybase Unwired Platform (SUP), guiding customers to choose the platform to develop and manage device-agnostic applications from a
central platform — rather than trying to manage a raft of point solutions.

However, SAP has met some resistance from its own community. Developers have voiced displeasure at the price tag associated with SUP, and enterprise customers are just beginning to pin down specific use cases for mobile applications and draw up their basic strategies. I think the mobility picture for SAP customers will clear up considerably by this time next year, as savvy developers (from SAP and beyond) lay the foundation with a first generation of proven mobile applications and solution architectures.